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14.11.202319:07 Forex Analysis & Reviews: Analysis of GBP/USD. November 14th. The US inflation report significantly impacted the market

The wave analysis for the pound/dollar pair remains simple and understandable. The construction of a new downtrend segment continues, the first wave of which has taken on a rather prolonged form. There is no reason for the British currency to resume the upward trend, so I do not even consider such a scenario. The assumed wave 1 or a is completed. For the euro, wave 2 or b already has a five-wave form, while it has taken on a three-wave form for the pound. Thus, for both pairs, wave analysis currently allows for the resumption of the decline. This is the moment I was waiting for. For the British currency, the structure of wave 2 or b should have taken on at least a three-wave form.

The wave pattern currently looks good and convincing. If it were not for the US inflation report, we would most likely have seen a continuation of the decline in the pair and would have become even more convinced of the transition to wave 3 or c construction. However, wave 2 or b may now take on a more complex form. This month's American statistics have let us down significantly, causing the delay in building the corrective wave.

Salaries in Britain fell slightly.

On Tuesday, the pound/dollar pair's exchange rate rose by 145 basis points. Undoubtedly, such a strong rise in the pound was unrelated to British statistics or any other events, except for the US inflation report. This report caused all the movement of 145 basis points, which still needs to be completed. Thanks to this report and the data at the beginning of the month from Nonfarm Payrolls, the US currency cannot resume its strengthening, and wave 2 or b is dragging on. Nothing can be done about it because no one can predict in advance what the values of such important reports as inflation or payrolls will be. Therefore, wave analysis has to be adjusted to them.

Against the backdrop of the US inflation report, it is not particularly desirable to consider British statistics. It did not impact the pair and market sentiment, although British reports were also important and interesting. For example, the report on the change in average earnings showed a slowdown in growth to 7.9%, although the market expected a decline to 7.4%. The number of applications for unemployment benefits increased more than the previous month (+17.8 thousand), and the unemployment rate remained unchanged at 4.2%. The reports were diverse, but the market reacted differently.

Now, I am waiting for the completion of the increase in quotes because one report on US inflation will not allow buyers to go far. An unsuccessful attempt to break through the 1.2470 level, corresponding to 50.0% Fibonacci, may indicate the market's readiness for sales. In this case, wave c in 2 or b will take on a clear three-wave form.

General conclusions.

The wave pattern of the pound/dollar pair suggests a decrease within the descending trend segment. At most, the British currency can expect a correction. At this point, I recommend selling the pair with targets below the 1.2068 level because wave 2 or b will ultimately be completed. And it was only completed with a series of disappointing reports from America. Sales should be manageable first because there is always a risk of complicating the existing wave.

The picture is similar to the euro/dollar pair on the larger wave scale, but there are still some differences. The descending corrective trend segment continues its construction, and its first wave has already taken on a prolonged form and has no relation to the previous upward trend segment.

*Phân tích thị trường được đăng tải ở đây có nghĩa là để gia tăng nhận thức của bạn, nhưng không đưa ra các chỉ dẫn để thực hiện một giao dịch.

Chin Zhao,
Analytical expert of InstaSpot
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